What’s Changing in the Cyprus Real Estate Market: A Buyer & Investor Guide
The Cyprus real estate market is entering an important transition period. With new VAT rules coming into full effect by mid‑2026 and Limassol continuing to outperform other districts, buyers and investors who understand what’s changing will be best positioned to act confidently.
Below, we break down the VAT changes, the current Limassol market dynamics, and what these developments mean for anyone considering a property purchase in the coming months.
VAT Changes on New Homes: What Buyers Need to Know
Cyprus has revised its reduced VAT framework for new residential properties, with transitional arrangements set to expire in June 2026. From that point forward, buyers will need to qualify strictly under the amended rules.
The Key VAT Rules
- The reduced 5% VAT rate applies only to a buyer’s primary residence
- The reduced rate is limited to the first 130 sqm of buildable area
- The maximum eligible property value is €350,000
- The total covered area may not exceed 190 sqm
- The total transaction value must not exceed €475,000
Any value or area above these thresholds is subject to the standard 19% VAT rate.
These changes place greater importance on unit size, layout efficiency, and pricing strategy, particularly for new developments.
How the VAT Changes Are Shaping Buyer Demand
As the 2026 deadline approaches, the market is already responding:
- Buyers are prioritizing smaller, well‑designed apartments
- Demand is shifting toward 1‑ and 2‑bedroom units that comfortably fall within VAT limits
- Greater focus is placed on developer compliance and clarity from the outset
Rather than slowing the market, the VAT changes are encouraging smarter, more sustainable housing choices.
Limassol Market Update: Why the City Continues to Lead
Limassol remains the most dynamic and resilient real estate market in Cyprus. Official sales data confirms continued strength in both transaction volume and total value.
What’s Driving Limassol’s Performance
- Strong local and international buyer demand
- Limited supply of land in prime urban and coastal locations
- High rental demand driven by professionals, expatriates, and long‑term residents
- Ongoing infrastructure and urban regeneration projects
Apartments & New Builds: Where Demand Is Concentrated
Across Limassol, buyer interest is increasingly focused on:
- New‑build residential projects
- Energy‑efficient buildings
- Practical layouts designed for modern living
- Properties suitable for both owner‑occupation and rental use
Smaller apartments, in particular, offer a strong balance between VAT efficiency, affordability, and resale potential.
How Sakyrco Supports Smart Property Investment
At Sakyrco, we develop residential projects with a clear focus on:
- 1 & 2 bedroom apartments designed to meet reduced VAT eligibility (subject to buyer criteria)
- Efficient layouts that maximise space and comfort
- Energy‑efficient construction aligned with modern standards
- Locations that support strong rental demand and long‑term value
Our approach ensures buyers are well positioned under the current VAT framework and prepared for future market conditions.
Final Thoughts
Cyprus remains a compelling destination for property buyers, with Limassol firmly established as the island’s leading real estate market. As the revised VAT framework approaches in 2026 and demand continues to favour well-designed, efficiently sized apartments, buyers who act with clarity and foresight can secure both tax efficiency and long-term value.
At Sakyrco, we closely align our developments with evolving regulations and real market demand. By focusing on smart layouts, and energy-efficient construction in prime Limassol locations, we help buyers navigate the new VAT landscape with confidence.
Understanding the rules — and choosing a developer that plans for the future — makes all the difference.